Apple confirmed on the phone to me that Dan Moren was wrong. You can NOT unbundle without canceling IUP entirely.
Apple Care One only works if you have another device active on AppleCare, and it is the "gateway" to older devices. IUP devices do not qualify because they are attached to their financing (eg Citizens Bank in the US or Goldman Sachs). They cannot be separated.
The "solution" is to buy a new device (or add AppleCare to a device recently bought as in 30 days), and add it as the gateway to older devices sub 4 years old that are not on the plan yet. I probably will upgrade my Apple Watch Ultra this year, which will be the gateway device. I hope. My iPhone will remain on IUP and will have its own AppleCare as part of that plan, unless they figure out a way to enter it into the Apple Care One system.
The senior AppleCare rep noted they agree the webpage is hyper confusing and most people would never get this nuance because it is not specifically called out.
It took Apple like 10 years for you to be able to merge iCloud accounts (e.g. those on legacy iTunes only apple IDs) so maybe in 10 more years they'll get this. ha